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Fall in oil prices brings 'crippling uncertainty' for north workers

By Gordon Calder

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The north of Scotland has provided thousands of highly skilled oil workers to the North Sea and beyond, Councillor Struan Mackie points out.
The north of Scotland has provided thousands of highly skilled oil workers to the North Sea and beyond, Councillor Struan Mackie points out.

OIL workers in the north are facing "crippling uncertainty" due to the global fall in oil prices, which has been made worse by the coronavirus pandemic.

The comment was made by Highland councillor Struan Mackie who wants the Scottish and UK governments to take action to help the industry. He says it is "an absolute necessity" such a vitally important part of the economy is protected.

Councillor Mackie, who represents Thurso and Northwest Caithness, described the slump in oil prices and production – largely caused by the fall in demand due to the virus – as "deeply concerning".

He said: "The global economic slowdown, which has been exacerbated by the spread of coronavirus, is creating crippling uncertainty for oil and gas workers in the north.

"Despite the many ups and downs in the fortunes of North Sea production, the global fall in oil and gas prices has seen traders offload the US benchmark for oil for negative values – the first time this has happened. Prices have been falling in almost every other category too."

The West Texas Intermediate is one of two main benchmark prices for purchases of oil worldwide. The other is Brent crude, which has also been falling.

"Although Aberdeen is the centre of the European oil and gas industry, the north of Scotland has provided thousands of highly skilled oil workers to the North Sea and beyond," Councillor Mackie said.

"That is why the ramifications of a global slump in demand and production are deeply concerning for oil sector employees and their families across Highland.

"Action is needed and is needed fast. Aberdeen City Council has petitioned both Scottish and UK governments to provide financial assistance to the industry, something I have asked the Highland Council to support.

"Post Covid-19, we need workers to have jobs to go back to in order to kick-start the economy and return to as close to normality as possible. A tailored package of support for the North Sea oil and gas industry is an absolute necessity to ensure a vitally important part of the economy is protected."

Trudy Morris, chief executive of Caithness Chamber of Commerce, is also concerned about the impact the fall in the oil price could have on the north.

She warned that the oil and gas sector is "not immune to the economic shock waves caused by Covid-19" and says it is important government supports the industry when the country comes out of the lockdown.

"It is particularly important that both UK and Scottish governments recognise the dynamic nature of the oil and gas market and the need of service companies in areas like the north Highlands to react quickly to these changes.

"To best support the economic recovery of the area post-lockdown, it is important we have air services to Aberdeen and Edinburgh that are fit for purpose and meet the needs of businesses in the area.

"It is hard to know what the future will hold for the oil and gas industry – and many others – in the north. What is important is that businesses have government support and access to the right infrastructure to enable them to adapt to whatever challenges and opportunities may come."

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